Chevron vs. Ecuadorean activists
Barring delays, an epic legal
battle is expected to be decided this year.
by John Otis
www.globalpost.com/, May 3, 2009
In the middle of the Amazon rain forest,
an epic 15-year-long legal battle pitting Chevron Corp. against
Ecuadorean environmental activists is finally drawing to a close.
Billions are at stake in the lawsuit,
which is being argued before a judge in a ramshackle courtroom
in the Ecuadorean oil boom town of Lago Agrio, located just across
the border from Colombia. If Chevron loses, the San Ramon, Calif.-based
firm could be ordered to pay up to $27 billion in reparations
- potentially the largest civil damages award ever imposed.
The plaintiffs, who are represented by
Ecuadorean and U.S. attorneys, claim to speak for a broader community
of about 30,000 residents living in the Amazon region in northeastern
Ecuador. They allege that oil production by Texaco, which operated
in Ecuador from 1964 to 1990 and was acquired by Chevron in 2001,
poisoned their lands, rivers and ground water with toxic chemicals.
They also say that the contamination forced
Indian communities to relocate and led to a surge in cases of
cancer and miscarriages.
"This is probably the world's worst
oil-related contamination on the planet at this moment,"
said Steven Donziger, a New York-based attorney representing the
"It is horrendous," Donziger,
who has made more than 100 trips to the region, said in a telephone
interview. "It is at least 30 times larger than the Exxon
Valdez oil spill."
Chevron, which has no operations in Ecuador,
argues that Texaco carried out a successful clean-up of 160 waste
pits in the 1990s that cost the company $40 million. Texaco was
then released from any future liability for environmental damages
by the Ecuadorean government.
Chevron portrays itself as the victim
of opportunistic attorneys, a corrupt legal system, and Ecuador's
left-wing president, Rafael Correa, who has spoken out against
the American firm.
"This is fraud," said Donald
Campbell, a Chevron spokesman, during a recent interview in Bogota.
"It's the product of collusion between the president of Ecuador
and U.S. lawyers who are looking for a big payday."
Texaco first began drilling in the Ecuadorean
Amazon in 1964 and struck oil in 1967. Full-scale production began
in 1972 in a consortium with the Ecuadorean state oil company,
which later became known as Petroecuador.
Though Texaco was the minority partner,
the U.S. company was the operator, and was therefore responsible
for all key decisions, according to the plaintiffs.
Over the years, Texaco produced about
1.7 billion barrels of oil, though the bulk of the profits went
to the Ecuadorean government. Today, Ecuador is one of Latin America's
largest oil exporters. Petroleum accounts for about half of the
nation's export earnings.
But when Texaco began operating, Ecuador,
like most Latin American nations, had weak environmental regulations.
Lawyers for the plaintiffs charge that Texaco took full advantage
of the lax rules and saved billions by recklessly disposing of
toxic oil waste.
Between 1967 and 1990, lawyers claim that
Texaco spilled more than 26,000 barrels of oil, and released drilling
muds and billions of gallons of toxic production waters directly
into the soil and rivers of northeastern Ecuador, where the company
operated 356 wells.
Much of the oil waste was dumped into
about 900 unlined pits that often leached toxic chemicals - such
as barium, benzene and toluene - into the forest and groundwater,
according to a report by Richard Cabrera, a court-appointed expert.
Donziger said that Texaco's disposal methods
would have been illegal in the United States. As early as the
1920s, he said, "the entire oil industry was moving away
from the waste disposal methods Texaco used in Ecuador."
In his report, Cabrera wrote that he found
higher-than-normal rates of cancer and miscarriages among the
people living in and around the former Texaco concession. Chevron
officials strongly dispute his claim, saying that independent
analysts have determined that cancer rates are no higher in the
Amazon region than in the rest of the country.
The case is attracting attention far beyond
Ecuador. On April 28, Democratic Rep. Jim McGovern of Massachusetts
held a congressional hearing in Washington to discuss the Chevron
case. At one point, he recalled his visit to former Texaco oil
sites in Ecuador late last year.
"What I found was shocking - a super-fund
site about the size of Rhode Island in the Ecuadorean Amazon,"
"I visited one indigenous community
that had been forced to move three times to try and escape the
oil pollution and contamination that was killing the fish, driving
away the game, destroying medicinal plants and sickening the community,
including the children," he said. "Despite moving, they
still couldn't escape the impact of the oil."
Chevron officials, who are waging a fierce
lobbying campaign to turn the tide in the legal case and win over
public opinion, insist that the lawsuit should be thrown out on
For starters, they claim that much of
the environmental damage was caused by Petroecuador, the state-run
oil company that took over Texaco's operations in 1990. Texaco
pulled out of the country two years later.
Soon afterwards, Texaco signed the agreement
with the Ecuadorean government to clean up 160 waste sites in
exchange for immunity from any future legal claims.
"If you go to those areas today,
the area is grazing land, jungle or palm oil plantations,"
said Campbell, the Chevron spokesman. By contrast, he said, many
concerned eco-tourists and journalists have been taken to sites
that were polluted by Petroecuador, not Texaco.
Another problem is what he described as
a corrupt and biased legal system in Ecuador.
For example, he said that Cabrera, the
court-appointed expert charged with reconciling differences between
the two sides, is in cahoots with the plaintiffs and has lifted
passages from their briefs for his own reports.
Meanwhile, President Correa, a left-wing
nationalist who was re-elected April 26, has lambasted Chevron
in public, making it even harder for the company to receive a
fair trial, according to Campbell.
However, Chevron successfully petitioned
a U.S. federal judge in New York - the former home of Texaco's
world headquarters, and the place where the suit was originally
filed in 1993 - to transfer the case to Ecuador. In doing so,
Chevron praised Ecuador's legal system as fair and professional.
The plaintiffs, in turn, call Texaco's
immunity agreement the product of corrupt wheeling and dealing.
Two Chevron lawyers and seven former Ecuadorean government officials
who put together the agreement are now under criminal indictment
for lying about the results of Texaco's clean-up.
Amid all the legal wrangling, the lawsuit
has produced about 150,000 pages of testimony and has dragged
on for a decade and a half. Barring more delays, the judge is
expected to rule on the case by the end of the year.
If Chevron loses, Campbell vowed that
the company would appeal. "We're going to fight this until
hell freezes over," he said. "And then we'll fight it
out on the ice."